Lebanon’s Hariri agrees reforms amid nationwide protests over economic crisis

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A general view of demonstrators during an anti-government protest in downtown Beirut, Lebanon October 20, 2019. (Reuters)
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A general view of demonstrators during an anti-government protest in downtown Beirut, Lebanon October 20, 2019. (Reuters)
Updated 21 October 2019

Lebanon’s Hariri agrees reforms amid nationwide protests over economic crisis

  • Hariri gave his feuding coalition partners a 72-hour deadline on Friday to agree to reforms that could ward off economic crisis, hinting he may otherwise resign
  • The agreement was reached as hundreds of thousands of protesters flooded the streets

BEIRUT: Lebanese Prime Minister Saad Al-Hariri agreed on Sunday a package of reforms with government partners to ease an economic crisis that has sparked protests aimed at ousting a ruling elite they see as riddled with corruption and cronyism.
Officials told Reuters the agreement was reached as hundreds of thousands of protesters flooded the streets in the biggest show of dissent against the establishment in decades.
A sea of people, some waving Lebanese flags, crammed roads for the fourth day, calling for revolution in protests that resembled the 2011 Arab revolts that toppled four presidents.
Hariri, who is leading a coalition government mired by sectarian and political rivalries, gave his feuding government partners a 72-hour deadline on Friday to agree reforms that could ward off crisis, hinting he may otherwise resign.
Hariri accused his rivals of obstructing his reform measures that could unlock $11 billion in Western donor pledges and help avert economic collapse.
The reform decisions require a 50% reduction in salaries of current and former presidents, ministers and MPs plus cuts in benefits to state institutions and officials. It also obliges the central bank and private banks to contribute $3.3 billion to achieve a “near zero deficit” for the 2020 budget.
It also includes a plan to privatise its telecommunications sector and an overhaul to its costly and crumbling electricity sector, which poses one of the biggest strains on the country’s depleted finances.

Meanwhile, Saudi Arabia's Ambassador to Beirut, Waleed Bukhari, said 132 Saudi citizens have been evacuated from Lebanon on Sunday, following an emergency meeting aimed at planning, securing and ensuring the safety of the Kingdom's citizens in the country.

HOPEFUL
The anti-government protests, fueled by crippling economic conditions and anger at perceived government corruption, have fanned out across the country since Thursday.
Cheerful, buoyant and hopeful their protests would bring change, people of all ages and religions played patriotic songs and danced in the streets, with some forming human chains and chanting for their leaders to be ousted.
Festival-like scenes dominated the country from the capital Beirut to remote towns, with loudspeakers blaring music as crowds kept pouring into the streets.
“I am here because I am disgusted by our politicians. Nothing works. This is not a state. Salaries are very low, prices are very high. We don’t even have work these days,” said Cherine Shawa, 32, an interior architect, in Beirut.
Ending rampant corruption is a central demand of the protesters, who say the country’s leaders have used their positions to enrich themselves for decades through favorable deals and kickbacks.
“We’re here to say to our leaders ‘leave’. We have no hope in them but we’re hopeful that these protests will bring change,” Hanan Takkouche, in her 40s and among a group of women in the capital. “They came to fill their pockets. They’re all crooks and thieves,” she added.
Many blamed the ruling elite for driving their children out of Lebanon because they failed to build a country that could provide jobs.
Army troops and security forces deployed across the country and blocked roads leading to the presidential palace. Banks said they would remain closed on Monday and the main labor union announced a general strike, threatening further paralysis.
CONDITIONS MET
A chorus of voices, from union leaders to politicians, have joined popular calls for Hariri’s government to resign. The Maronite Christian Lebanese Forces party has said its four ministers would withdraw from the government.
But the approval of the reforms by Hariri’s feuding partners seem to have met his conditions and would most likely push him to stay the course, government sources say,.
If Hariri resigns it would be harder for the various parties that make up the ruling coalition to form a new cabinet.
A new cabinet would also likely see Iranian-backed Hezbollah and its allies more in control, a shift that would make it nearly impossible for international donors or Gulf Arab countries at odds with Iran to offer aid or investments.
Without a foreign funding boost, officials and economists predict a currency devaluation or a debt default within months.
The IMF said last week that Lebanon’s crisis requires tough austerity measures such as tax hikes and levies on fuel, steps the country’s politicians have publicly vowed not to take.
Lebanon’s economy registered just 0.3 percent growth last year. The IMF said the reforms were needed to stem a ballooning deficit and public debt it forecasts to reach 155 percent of GDP by year-end.
The officials said the budget would not include additional taxes or fees after a decision last week to put a levy on WhatsApp calls triggered the unrest.
The reforms also called for establishing new regulatory and transparency bodies within a “short period” of time to oversee reform plans.


SALT conference: Saudi Arabia, UAE ‘promoting US engagement’ in the Middle East

Updated 11 December 2019

SALT conference: Saudi Arabia, UAE ‘promoting US engagement’ in the Middle East

  • Foreign policy scholars analyze the future of US-Arab ties at thought-leadership forum in Abu Dhabi
  • There is disillusionment among Americans regarding the investment of US resources in the Middle East

ABU DHABI: The transformations taking place in Saudi Arabia and the model adopted by the UAE will be crucial to moving US-Arab relations forward.

This was one of the many insights offered by Norman T. Roule, chief executive officer at Pharos Strategic Consulting LLC, a GCC- and Iran-focused company, during a panel discussion at the first SALT Conference in Abu Dhabi.

He said what Saudi Arabia is doing, and given what the UAE has done so well, will promote engagement between entrepreneurs and academics, adding that the people who actually move societies “are more efficient, in many ways, than governments.”

Roule was one of three speakers in the discussion on the “Future of US-Arab relations”, moderated by Editor-in-chief of Arab News Faisal J. Abbas. The other two were Richard Haass, president of the Council on Foreign Relations, and Dania Koleilat, affiliated scholar at the Issam Fares Institute for Public Policy and International Affairs.

“Governments will deal with the big, heavy, perhaps unsolvable issues, but I have great hopes for this region,” Roule said, referring to the Gulf countries.

“There has never been so much education. (It is) a young region aspiring beyond sectarianism, corruption and the old ways of thinking - and we should be part of that evolution.”

According to him, entrepreneurs will be the future of engagement between the US and the Middle East. To this end, he suggested, bringing more Americans to the Middle East – something the three-day SALT Conference has done - will prove vital.

Roule said “there has never been so much people-to-people engagement between the US and the region as we have today.” Additionally, there is social media, which “ties together the US and the region in a way that has not happened before.”

In the context of Saudi-US relations, Roule said there has been a shift in US public opinion due to Jamal Khashoggi’s murder. At the same time, he said, “former or current policymakers say,‘We have a strategic relationship with Saudi Arabia.’ But they will never explain what that means, or where we should take it.”

Roule thinks Saudi Arabia has an enormous role to play in such areas as moderating Islam worldwide, enhancing the role of women throughout the region, improving the economies of the Middle East, including Jordan and Israel, as well as rebuilding broken states, including Libya and Yemen.

“America needs to be behind that,” Roule said. “It’s unfortunate that policymakers don’t spend a lot of time talking about where we should go with the Kingdom, but I agree that the Kingdom doesn’t have a great reputation right now in the election.”

Nevertheless, he said he has seen US policymakers make requests to the Saudi leadership to support a number of regional initiatives.

Left to right: Faisal J. Abbas, Dania Koleilat Khatib, Richard Haass and Norman T. Roule discuss the relationship between the Middle East and the US at the first SALT conference in Abu Dhabi. (AN photo by Huda Bashatah)

Overall the Iraq war and the Afghan conflict were “anomalies” in how America has handled the Middle East since 1945. “And in many ways, America’s position in the Middle East is generally to try to avoid another conflict, to try to empower our allies to defend themselves, and to work to resolve regional problems,” he said.

Fluctuating Middle East oil prices are still felt in such places as Ohio, Roule noted, but added: “There is fatigue in the US over endless peace process efforts that seem to go nowhere, endless wars in the Middle East, which consume budgets, armies, calendars and reputations and which never seem to end for anybody. There’s not a lot of interest in doing that.”

In a similar vein, Dr. Richard Haass, president of the Council on Foreign Relations, one of Washington’s most influential foreign-policy think tanks, said that when the Cold War ended 30 years ago, nobody would have predicted that such a large percentage of American foreign policy would be consumed in the Middle East, beginning with the Gulf War, which was “thrust” on the US by “Saddam (Hussein’s) aggression”.

“But then we ultimately had what I would call wars of choice, in places like Iraq in 2003, and some other issues that we’re dealing with now,” he said.

“There’s a general sense that the Middle East absorbed too high a percentage of America’s national security resources. Our energy interests in the Middle East and our direct interests are down.”

Haass said there is disillusionment among Americans who think that the return on investment of the resources the US devoted to the Middle East has not been particularly good. “We have a domestic society that is more divided,” he said, “and, internationally, there are several big developments, one of which is the rise of US-Chinese competition.”

He said what is emerging for many as the defining feature of US foreign policy is a much worse relationship with Russia, a much less certain Europe, problems in Asia, including China’s rise and North Korea’s nuclear weapons, and global issues such as climate change.

“The Middle East has to compete with other regions of the world, other relationships and other challenges at the global level,” Haass said. “So it’s not surprising that there’s a dialing down, or a re-evaluation, of how much we are involved in the region and how we are involved.”

This regional “dialing down” by the US was called out by Koleilat, particularly in the context of the ongoing protests in Iraq and Lebanon. She said "the two countries have reached a boiling point" as an opinion poll shows strong majorities supporting a separation of politics and religion.

As a Lebanese who specializes in US-Arab relations, Koleilat spoke of a personal feeling of betrayal over the US administration’s position.

“Lebanese people have realized that sectarianism has led to clientelism, which has led to corruption, which in turn, had led to state failure,” she said. “Today, we have gone from 30 to 50 percent of Lebanese below the poverty level and the state is unable to provide services.”

Although she said the US could not be expected to engage with protesters, it could still put pressure on the Lebanese government to reform and change, adding that such pressure could include withholding of support unless such reforms were implemented.

“The demands of the Lebanese people are very clear,” she said. “We want a non-political government of technocrats.”

According to Koleilat, the US is less interested in the Middle East these days because of three factors, one of which is American isolationism.

“It started after the Iraq war. People in the US want to disengage from the region,” she said.

“The second factor you have to look at is Trump’s way of conducting foreign policy in a transactional manner, so you don’t see engagement for the long haul.”

The third factor is the strategic value of oil, she said. “I don’t see the doctrine where the US would say it is ready to use military force to keep the security of the Gulf,” she said.

“So, if you take these three factors into consideration, there is less American interest and less engagement, and this (approach) will continue in the future.”

For his part, Haass cited Iran as a case where the present US administration has succeeded in exerting tremendous pressure - more than what analysts had predicted was possible - through unilateral sanctions.

The question is to what end, he said.

“Sanctions are a means, they’re a foreign policy instrument,” he said. “The question then is what our definition of success and our goal are here.”

Haass said it is unlikely the government in Tehran can be brought down as the system has proved resilient for four decades now. Rather, the US needs to signal to Iran and have a conversation about its requirements in the realms of nuclear technology and missiles, as well as regional and local issues, in order to have a degree of sanctions removed.

“That, to me is what we used to call diplomacy,” Haass said. “The question is whether there is a place for diplomacy.

The answer is “potentially yes. If not, the danger is we drift towards war because Iran has shown it is simply not going to absorb economic pressure or warfare from us. We need to have a diplomatic initiative.”